Associated Press Rep. Jim Renacci, R-Ohio, joined at right by Rep. Pat Meehan, R-Pa., makes a point as the House Ways and Means Committee debates the Republican tax reform bill Wednesday on Capitol Hill.
Thursday, November 09, 2017 1:00 am
Rising cost, voters' mood becloud tax reform effort
Mike DeBonis | Washington Post
Republicans seeking to overhaul the federal tax code faced new head winds Wednesday, including a new $74 billion hole in their plan and political fallout from GOP losses in Tuesday's state and local elections.
Democrats won gubernatorial races in New Jersey and Virginia on Tuesday and also stood on the cusp of winning control of the Virginia House of Delegates – a setback that many are calling a wake-up call to the GOP.
But top Republican tax writers split Wednesday over exactly what signal voters sent. Senate Finance Committee Chairman Orrin Hatch, R-Utah, said the losses could shape the tax bill going forward.
Asked whether he is feeling pressure to tilt the tax plan more toward the middle class, Hatch said, “I think we've been moving that way anyway.”
But House Speaker Paul Ryan, R-Wis., said he intended to move full steam ahead on a House plan that would cut taxes by $1.5 trillion over 10 years but deliver the bulk of the cuts to corporations and the wealthy.
On Wednesday, the party faced a new challenge that could force it to take some of the bill's tax benefits away from businesses, individuals or both.
Changes made to the bill since its introduction mean it would now add $1.574 trillion to annual deficits over a decade, according to the Joint Committee on Taxation. That's $74 billion over the maximum amount of debt a GOP bill can add if Republicans want to take advantage of special rules that would allow them to pass the bill through the Senate with 50 votes – a must given that Republicans hold only 52 Senate seats and Democrats have signaled broad opposition to the bill.
Republicans argue that the business tax cuts will drive economic growth, adding jobs and pushing up wages. But they have had to battle analyses showing that middle-class taxpayers would reap only a fraction of the bill's direct benefits.
And while GOP leaders argue that the bill will mostly pay for itself by increasing growth, that is based on speculative analyses that congressional scorekeepers have not endorsed.
Democrats pounced on the election results and warned of a middle-class backlash that would only grow if Republicans continued their tax push.
“It should be a giant stop sign for the tax bill,” Senate Minority Leader Chuck Schumer, D-N.Y., told reporters. “Want t o pass this tax bill? Want to hurt the suburbs? Make our day.”